Sync
Around the time that ChatGPT was first released to the public, Alex Bestall, CEO of Rightsify, a music production library, discovered that he was sitting on a new, lucrative business opportunity. “I realized all the songs and all the metadata we have around the songs had a lot of value for AI,” he says. “It was a pretty quick and easy choice for us to license our library out.”
Hundreds of thousands — if not millions — of songs or other musical content are needed to train a competitive AI model to generate music. Though a number of AI companies believe they don’t need to pay for the music that their models train on, citing “fair use,” others have taken a more musician-friendly approach by paying artists and rights holders when using their music to train AI models.
On the surface, the AI industry seems like a perfect new customer for music production libraries — affordable, pre-cleared catalogs of songs in a variety of styles. Historically, production music has been popular among advertisers, social media creators, podcasters and low-budget film and TV producers who need music to soundtrack their creations but lack the time or money to license big-name hits, which often have multiple rights holders and hefty fees. As use cases for production music have grown, so has that sector of the publishing business. As of 2022, MIDiA Research says production music is worth about $1 billion across recorded music and publishing combined.
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While many artists’ rights advocates consider licensing songs to be the “ethical” way to train an AI music model, it still poses a legitimate threat to the existing music business: “Once the [licensing transaction] is made, that model is going to end up totally competing with you for the same customers,” says Antony Demekin, CEO of Tuney, an AI music company that makes songs intended for social media creators and podcasters. “Over time this could degrade your whole business if you’re not careful about the deal you make.”
No standard contract exists for the licensing of production music for AI training. Despite the long-term risks, Bestall says he has licensed his back catalog to multiple AI companies. (Non-disclosure agreements prevent him from revealing which ones.) “Usually we license our back catalog and then we have an ongoing commitment to deliver a certain amount of music over the next two or three years of the agreement,” he says.
In the short term, these new deals between music production libraries and AI companies have actually created jobs for more human musicians. Given his new customers’ desire for more music during their deal terms, Bestall now has 24 full-time musicians — and almost 100 contractors — employed to make more music and grow Rightsify’s library, which already has over 1 million copyrights.
Lee Johnson, CEO and founder of production library Audiosparx, says AI has also allowed him to grow his business. Audiosparx is best known for licensing its catalog to train Stability AI’s Stable Audio model beginning in 2023, and Johnson says he received permission from the musicians represented in his catalog before he agreed to license their music to the AI company. Audiosparx acts as the licensor for production musicians, but unlike Bestall’s library, it does not acquire the songs in its catalog outright. “We took the deal to our artist community and about 90% of the artists opted into it,” he says. “About 10% decided to stay out of it. It was encouraging to see that much uptake because a lot of people are very passionately against [AI]. … We just felt it made more sense to have a seat on the train and ride the train to the future, rather than getting run over by [it].”
Bestall and Johnson say that, so far, partnering with AI companies has not yet affected their other business. Bestall, however, remains sober about the changes that may occur in the next few years. “I know it’s a threat to our existing business lines, but a huge opportunity for the future,” he says. “I think if people are too married to the exact business model of the past, they may struggle.” Johnson, who has pivoted Audiosparx’s business multiple times over its 20-year existence, expresses a similar view about being open to change.
Not everyone agrees. “I think this is short-term money for a long-term loss,” says Henry Phipps, an emerging film composer who previously held a full-time job writing songs for a production library. After surveying the future of AI music, he left his post to try working for an AI music start-up. Now, he’s back writing for libraries and working toward his dream of being a film/TV composer. (Phipps spoke to Billboard under the condition that his former employers’ names would be kept private.) “But you can’t blame anyone for taking the opportunity to include their music in these datasets because you’d be missing out on a short-term paycheck, and everyone else would go ahead,” he says. “It’s kind of futile to try to stop the tide. Someone will always take the deal.”
To Phipps, the way production music is made is already similar to the way AI music is prompted. “I get a brief, which feels like a prompt,” he says. “Recently, one of those prompts was for reality TV with a bunch of adjectives, and then my job is to return a piece of music. It already feels like machine work in a way.”
While “very few people aspire to be production library composers long-term,” Phipps explains, “it is a way into [the music business] — to survive, eat and pay rent and work towards projects that are more creatively fulfilling.” Phipps says working at an AI music start-up made him “more nervous” for his future opportunities as a composer for film and TV. As he sees it, AI music could augment, but not entirely replace, the compositions of blockbuster film scorers — but it might “cut off the bottom rungs of the ladder” by decreasing opportunities for young upstarts like him.
Ed Newton-Rex, former vp of audio for Stability AI and founder of non-profit Fairly Trained, which certifies AI music companies that properly license their training data, advises that “if a library wants to take a deal like this, the terms should be very well thought through.”
Particular areas of concern Newton-Rex identifies include making sure that once a deal term ends, the AI model that used it will be retired or re-trained without the library’s material. “There’s no current way to just untrain a model, but you can add clauses to control what happens after the license is over,” he says. Newton-Rex also advises libraries to be careful about licensing their data to an “open-source model” — a move he calls “totally irreversible” because it makes the model available for public use.
Still, Newton-Rex admits there is “absolutely” still risk ahead. “Musicians making production music are hugely at risk,” he says. “Ultimately, generative AI is faster, cheaper and the quality is already very good.”
Just in case, Bestall is covering his bases by launching his own AI model, Hydra II, to generate royalty-free background music for cafes, hotel lobbies and other public spaces, should his customers ever prefer AI music to his current repertoire of background library music. Still, he feels his library will always be essential: “We’re not too concerned about the possibility of AI companies saying they don’t need production music anymore. Human data is so valuable for AI.”
Nick Ditri’s career as a dance music producer got a big boost when Tiesto used a 2013 bootleg remix of Avicii’s “Silhouettes” by his duo, Disco Fries. But like countless other unauthorized remixes, “Silhouettes” isn’t found on most of the popular streaming platforms. “Unfortunately, that doesn’t live anywhere outside of YouTube when Tiesto played it,” Ditri tells Billboard.
That could soon change. Eleven years later, Ditri is trying to give commercial legitimacy to tracks in that commercial gray area. He is a managing partner of ClearBeats, a startup that enables derivative works — remixes, interpolations, mashups and alternate versions — to become properly licensed tracks. ClearBeats’ other managing partner, Bob Barbiere, is a former Dubset executive and veteran in digital technology and rights clearances. Ditri and Barbiere created the company with Suzanne Coffman and Yolanda Ferraloro of veteran music sync company Music Rightz.
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Digital platforms are awash in unauthorized derivative works because “it’s the easiest way to get your foot in the door, especially in dance music and in hip hop,” says Ditri. In a perfect world, those tracks would be licensed for distribution to digital platforms or synchronizations in TV shows, advertisements or movies. “But the problem is it usually ends at SoundCloud where it might get muted or pulled down,” he says. “[Or] it ends at YouTube or a DJ pool.”
ClearBeats wants to address what Barbiere calls the “90/90 irony.” He estimates that 90% of artists who create derivative works want publicity and promotion, not the original artist’s rights or royalties. Additionally, 90% of rights owners would rather make money from a derivative work than take it down from a digital platform. But because the proper infrastructure doesn’t exist, Barbiere estimates that less than 5%, and maybe as little as 1%, of derivative works have proper attribution and are earning money for rights holders.
“Why shouldn’t 90% of that content live in an ecosystem where everybody can distribute into it, consume it, be properly attributed to it, and royalties paid downstream?” asks Barbiere.
The status quo not only prevents original recordings’ ability to generate revenue from derivative uses, but it also limits creators’ ability to build their careers, says Ditri. “If [producers] built a playlist network of five amazing Spotify playlists or Apple music playlists, and that’s their main source of promo and then they go and do a bootleg, that bootleg’s only gonna live wherever they posted — which is not going to be Spotify. So, they can’t even tap into their own networks. And it’s limited on Instagram and other socials as well.”
Currently, ClearBeats is helping labels, distributors and artists with bespoke licenses, working on a few long-term, strategic projects and helping companies identify and collect unpaid or suspended royalties. Barbiere says he has been contacted by distributors who want to help clients get licenses for tracks that incorporate samples as well as streaming platforms that want to license music catalogs to allow their users to create derivative works. A subscription-based registry for licensors and licensees is expected to roll out at the end of 2024 into 2025.
As for Ditri, co-founding ClearBeats provides him an opportunity give Disco Fries’ derivative works like “Silhouettes” a life outside of YouTube. “I’m thankful for the video clip,” he says, “but wouldn’t it be wonderful if this had existed back then?”
With film and television production shut down for the foreseeable future, the Hollywood writer and actor strikes are ravaging all the businesses that touch the movie industry, from catering to editing to flower delivery — including music synchs. After generating $382 million for record labels and nearly $1.5 billion for publishers in 2022, the sector is beginning to struggle as the strikes proceed.
“That’s been quite a dark thing,” says Stephanie Diaz Matos, head of music supervision for writer-actress Issa Rae’s Raedio, a music company that includes a publisher and label. “We have several shows that, once the actors went on strike, they stopped production.”
Adds a music publishing source: “It could be bumpy if this goes on for a really long time.”
Since the Writers Guild of America strike began in early May — and the Screen Actors Guild joined earlier this month — labels and publishers report receiving fewer requests for pitching songs. “The amount of film and TV briefs I get have gone way down,” says Mara Kuge, founder and president of Superior Music Publishing. “Briefs for trailers [some of the most highly paid placements] have also been in more mild decline as well,” adds Jack Ormandy, co-founder and CEO of SILO: Music, a publishing, management and synch house.
The Writers Guild of America, East and West, represent 11,500 movie and TV writers and have been unable to agree on a new contract with Hollywood studios and streaming services over issues like higher compensation in the streaming economy, protection from the effects of artificial intelligence, more contributions to health and pension funds and improvements in workplace standards. Thousands of actors in the SAG-AFTRA union joined the writers’ picket line July 14 after negotiations broke down with studios over a new contract of their own.
While there’s hope the strikes could be resolved by the fall, some sources fear they could drag on into 2024, frequently citing a chilling quote from an unnamed studio executive in a recent Deadline article: “The endgame is to allow things to drag on until union members start losing their apartments and losing their houses.”
“I don’t know what that’s going to look like in three months or six months. I’m hopeful this will come to a resolution and [the striking actors and writers] get the benefits they hope for,” says Esther Friedman, senior vp of creative film and television licensing for Sony Music Publishing. “We felt it in the late-night TV shows. Those stopped right away.”
Synch revenue is a major, and growing, source of income in the music business. According to the RIAA, synchronization licensing — the right required to use music along with visual media — increased by 24.8% in 2022, and the synch business made up 26% of all publishing royalties, says the NMPA. Placements in studio film and TV projects can earn artists up to six figures, and prominent synchs can lead to even greater financial ripple effects after a show’s release. Perhaps the greatest recent example is Kate Bush’s “Running Up That Hill (A Deal With God),” which catapulted to No. 3 on the Billboard Hot 100 after an appearance in Netflix’s Stranger Things repopularized the original 1985 single.
The strikes have shocked the multimillion-dollar synch system of movie and TV music supervisors sending briefs to music publishers and labels. “Usually, if we are not getting a ton of briefs, or it’s a slower time, we’re wining-and-dining clients, checking in,” says Jessica Vaughn, head of sync for Venice. “But it’s hard to justify going to music supervisors right now and being, like, ‘Hey, how are you doing, looking for any music?’ Because some supervisors might be out of work or about to finish up one project and not sure what they’re doing next.”
For labels and publishers, the key to surviving the Hollywood strikes may be diversification — many are looking to advertisements, reality and unscripted TV shows, documentaries and overseas films to bolster synch revenue. Also: video games. According to MIDiA Research’s 2022 study on music and gaming, the gaming industry earned $138 billion in 2020, and games make up a sizable portion of the synch business. After the Hollywood strikes, Ormandy hired a new employee at his company to focus specifically on video-game licensing. Adds Vaughn: “I see this as an opportunity right now to focus in on gaming. Some people overlook gaming, but it really is huge.”
For now, labels and publishers are focusing on shows and films made before the strikes that are in post-production, and will still contribute to the synch business in the short term. But it’s tricky. “You sometimes can’t finish episodes without your writers or actors because things like voiceovers need to be added in,” Diaz Matos says.
Plus, if the strikes drag on, actors won’t be available for crucial film and TV promotion. Because of this problem, some studios are beginning to push back release dates, including the Luca Guadagnino film Challengers, starring Zendaya, which has moved from its Sept. 15 release to April 26, 2024. Because synch payments are made around three to six months after the date of a film’s release, these delays will be a pain point for music licensors, even if the placement was completed before the actors’ strike. “Down the line is where you start to feel it — three to six months out,” says the publishing source.
Superior Music Publishing’s Kuge adds that synch revenue is known to vary widely quarter by quarter. “It’s very up and down regardless,” she says. “People who deal with the world of synch are so used to it that they’re not going to feel the effects too much unless the strikes drag on for two or three quarters straight — that’s the point when it starts getting past the normal ups and downs.”
If this kind of diversification helps synch departments withstand losses from the strikes, music supervisors — those who compile soundtracks for film and TV and act as the go-between for productions and licensors — are not able to wait as long. Most supervisors are freelance contractors, working on a project-by-project basis. Sources say a number of notable music supervision firms have laid off staff members, citing the lack of projects in the pipeline.
“I actually furloughed my coordinator yesterday. I have one project I think is going to get a waiver [granted by the unions to certain independent films] — once that goes back, I think I can get her back,” says Lindsay Wolfington, a veteran music supervisor for streaming shows such as Virgin River, Monster High and the upcoming movie Love at First Sight. “We’ve all had to figure out healthcare on our own. The bank account’s not fun to look at.”
Music supervisors are not unionized, but the roughly 150-200 of them who work at Netflix are awaiting a National Labor Relations Board decision on a union-certification motion they filed last October. They’re seeking representation with the International Alliance of Theatrical Stage Employees, and their demands overlap with those of the striking writers and actors: more reliable payment deliveries, cost-of-living increases and healthcare and retirement and pension plans. “The rates haven’t changed in years, and it’s the same with writers and actors,” Wolfington says.
Julie Glaze Houlihan, another veteran music supervisor who has worked on Glass Onion: A Knives Out Mystery and other hit shows and movies, predicts the strikes will cause pain for the music business. “Clearance is going to slow down, record labels and publishers are going to lose revenue because music isn’t being licensed. It is a domino effect,” she says. “Nobody wants this to go on.” But SILO: Music’s Ormandy is more optimistic. “Though COVID was completely different for many reasons, it was also a time when the film industry just stopped, too,” he says. “What I’m banking on is that we know how to weather a similar storm.”
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